THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – January 22, 2013


As we look at today's setup for the S&P 500, the range is 18 points or 1.01% downside to 1471 and 0.20% upside to 1489.                

                                                                                                               

SECTOR AND GLOBAL PERFORMANCE

 

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EQUITY SENTIMENT:


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CREDIT/ECONOMIC MARKET LOOK:

  • YIELD CURVE: 1.61 from 1.59
  • VIX  closed at 13.42 1 day percent change of -0.96%
  • AAPL – “Most Read” article on Bloomberg this morn = “Apple May Face 1st Profit Drop in Decade As iPhone Slows”… so, ahead of AAPL earnings (tomorrow), it’s getting real newsy (UBS cutting price target this morn too) – but the stock isn’t raging oversold on my signal yet (it would be at $482). AAPL’s TAIL risk resistance line = $561.

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30am: Chicago Fed Nat Activity Index, Dec. (prior 0.1)
  • 10am: Richmond Fed Manufacturing Index, Jan. (prior 5)
  • 10am: Existing Home Sales, Dec., est. 5.10m (prior 5.04m)
  • 10am: Existing Home Sales M/m, Dec., est. 1.2% (prior 5.9%)
  • 11am: Fed to buy $1b-$1.5b TIPS in 2017-2042 sector
  • 11:30am: U.S. Treasury to sell $32b 3-mo notes, $28b 6-mo notes

  GOVERNMENT:

    • Obama seeks optimism renewal in 2nd inaugural ceremony
    • House, Senate meet at 10am
    • House Ways and Means holds hearing on debt limit
    • Senate debate, vote expected on Hurricane Sandy relief
    • Pfizer CEO Ian Read to testify in U.S. District court in jury trial on claim Chantix causes psychiatric disorders

WHAT TO WATCH

  • Dell said to hire Evercore to seek higher bids after buyout
  • Obama seeks optimism renewal at 2nd inauguration ceremony
  • BOJ sets 2% inflation target without adding stimulus in 2013
  • Greece’s new loan payment is cleared by euro area
  • Eurogroup picks Dutchman Dijsselbloem to succeed Juncker
  • Euro area grapples with ESM bank aid rules; set to approve design of financial-transaction tax
  • Atari U.S. units file for bankruptcy to break from parent
  • Alstom 3Q orders rise 3%, led by demand for trains
  • German ZEW investor confidence rises to highest in 2 1/2 yrs
  • SABMiller lager volume rises less than analyst ests
  • EADS CEO says to meet, beat earnings, sales goals at units
  • Israelis vote with Netanyahu probably heading for 3rd term

EARNINGS:

    • Dupont (DD) 6am, $0.07
    • Verizon (VZ) 6:30am, $0.50 - Preview
    • II-VI (IIVI) 6:55am, $0.21
    • Regions Financial (RF) 7am, $0.21
    • Synovus Financial (SNV) 7am, $(0.11)
    • Travelers (TRV) 7am, $0.14
    • Waters (WAT) 7am, $1.59
    • TD Ameritrade Holding (AMTD) 7:30am, $0.24
    • Delta Air Lines (DAL) 7:30am, $0.28
    • FirstMerit (FMER) 7:30am, $0.33
    • PrivateBancorp (PVTB) 7:30am, $0.26
    • Brinker International (EAT) 7:45am, $0.50
    • Johnson & Johnson (JNJ) 7:45am, $1.17 - Preview
    • Freeport-McMoRan (FCX) 8am, $0.72 - Preview
    • Kansas City Southern (KSU) 8:01am, $0.82
    • Canadian National Railway (CNR CN) 9am, C$1.41
    • Celestica (CLS CN) 4pm, $0.19
    • Cree (CREE) 4pm, $0.30
    • RF Micro Devices (RFMD) 4pm, $0.06
    • Total System Services (TSS) 4pm, $0.33
    • Woodward (WWD) 4pm, $0.46
    • CSX (CSX) 4:01pm, $0.39
    • Google (GOOG) 4:01pm, $10.55
    • Ezcorp (EZPW) 4:01pm, $0.58
    • Albemarle (ALB) 4:03pm, $0.99
    • IBM (IBM) 4:03pm, $5.25
    • CA (CA) 4:05pm, $0.61
    • Intuitive Surgical (ISRG) 4:05pm, $4.04
    • Norfolk Southern (NSC) 4:05pm, $1.19
    • Compuware (CPWR) 4:13pm, $0.10
    • Advanced Micro Devices (AMD) 4:15pm, $(0.18)
    • International Game Technology (IGT) 4:15pm, $0.24
    • Trustmark (TRMK) 4:30pm, $0.44
    • Texas Instruments (TXN) 4:30pm, $0.07
    • Community Bank System (CBU) 4:30pm, $0.54
    • UMB Financial (UMBF) 4:30pm, $0.67
    • Packaging of America (PKG) 5pm, $0.62
    • Rock Tenn (RKT) Post-Mkt, $1.27

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Commodities Climb to Three-Month High After Japan’s Policy Shift
  • Palm Favored by Ospraie Rising as Reserves Retreat: Commodities
  • Gold Trades Near One-Month High as BOJ Announces Stimulus Plan
  • Copper Reaches One-Week High as Bank of Japan Signals Stimulus
  • Brent Oil Rises to One-Week High as Japan Pledges More Stimulus
  • Sugar Drops to 2 1/2-Year Low as Stockpiling May End; Cocoa Down
  • Freeport Earnings Beat Estimates on Higher-Than-Expected Sales
  • EDF Investors at Risk of Losing Record Dividend on Costs: Energy
  • Iron-Ore Port Braces for Australian Storm as Apache Shuts Fields
  • Inmet Is in Confidentiality Pacts, Talks With Number of Parties
  • SovEcon Sees Weather Risks for Winter Crops in Southern Russia
  • Worst European Coal Slump in Five Years Not Over: Energy Markets
  • Billionaire Fredriksen Winning as LNG Tanker Rates Drop: Freight
  • Wheat Climbs to One-Month High as Winter Threatens Russian Crop

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CURRENCIES

 

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EUROPEAN MARKETS


GERMANY – despite the best ZEW print since May of 2010 (31.5 JAN vs 6.9 DEC), the DAX remains under corrective selling pressure this morn after failing to make higher-highs. Was that the ‘as good as it gets’ print for European high freq data? Maybe.

 

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ASIAN MARKETS


JAPAN – Abe called the BOJ’s inflation targeting “epoch making”, and while I am not sure what that’s supposed to mean, the market bought/covered Yen, big time, +1% vs USD on the “news” – Nikkei stopped going up on that and actually broke immediate-term TRADE support (10,733) for the 1st time in mths; Big Government Intervention = amplified market volatility.

 

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MIDDLE EAST


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The Hedgeye Macro Team

 

 

 


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People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

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UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

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Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

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Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

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An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

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